How Steve Jobs Reinvented Retailing, Pt. 2

Published in CSP Daily News

Building a team, developing an offer and telling consumers what they want

Gerald Lewis

NEW YORK -- In reviewing the way Apple CEO Steve Jobs changed retailing, two categories become evident: the basics (or the things you should be doing) and actions based on Jobs' ethos (more difficult, but with greater rewards).

Today's column focuses on those basics:

Build a team of A-players and use the best available experts in every area.

Jobs learned from everything and everybody. He recruited Ron Johnson, Target's vice president of merchandising (now CEO of JC Penney), to develop and head his retail operations, and he put Mickey Drexler, who transformed The Gap, on Apple's board. He relied on top architects and designers to create and evolve his stores.

The lesson here: Get the best advice and be prepared to pay for it. You are going to spend a lot of money executing your program. Spend enough to develop and implement it to be sure it's the best it can be.

It's the offer, stupid!

Jobs put all his emphasis on making great products and letting the profits flow from that. In the period after he was dismissed from Apple, the corporate executive who replaced him flipped the priorities and set a goal of making money instead of great products, to the point that, when they brought Jobs back, Apple was teetering on the edge of bankruptcy.

Jobs knew that Apple's product (in retail terms: the offer) is not just the merchandise, it also includes pricing, quality, uniqueness, assortment, service, availability, retail environment and ease of shopping. (Let's add, for a food store, cleanliness and appetite-appeal.) In fact, he later created Apple Stores because he didn't want to have his unique products sitting on shelves between what he considered to be inferior products by brands like Sony, IBM, Dell, etc., and sold by salespeople who knew little about them and who were most interested in the amount they made for selling certain items.

It's not your customers' job to know what they want.

It's your job to show it to them. Henry Ford said, "If I'd asked customers what they want, they would have told me 'A faster horse!' " For you, it means starting by knowing who you want to be when you grow up, then finding a niche in the market place, filling it and developing a market position that makes customers pass by your competitors to shop with you.

Next week, a look at other retailing lessons from Steve Jobs. One hint: K.I.S.S.

Click here to read Part 1 of this series.

Gerald Lewis provides transformational retailing guidance and execution to convenience-store operators. He can be reached at glewis@c-man.net or 646 215-7741 For more information go to www.geraldlewisteam.com.